1. Field of the Invention
The present invention relates to a credit card billing system and method, and more particularly, to a system and method for allocating all charges made by a credit cardholder, interest attributable to each charge and payments made by the cardholder, to sub-accounts specifically designated by the cardholder.
2. Description of the Related Art
At the current time, all issuers of credit cards, such as Visa, Mastercard and American Express, render periodic billing statements to their cardholders which list all charges and accrued interest. Where multiple cards are issued under one account, such as a business organization having cards for multiple employees or a family with several family members using an account, some credit card issuers list the charges and also reflect which person using the account incurred each charge. However, presently known credit card billing systems and methods do not provide a means for credit card users to have charged transactions, accrued interest on each charged transaction and payments, allocated to one or more sub-accounts specifically designated by the credit card user.
It is commonly necessary for a credit card account holder to account for and allocate each charge for various tax or business purposes, such as:
(i) Tax deductible versus non-deductible charges; PA1 (ii) Tax deductible versus non-deductible interest expense; PA1 (iii) Charges, including interest, which may be billed (i.e., passed thru) to a customer or client of a cardholder; and PA1 (iv) General or specific cost control accounting. PA1 (i) Tax deductible versus non-deductible charges; PA1 (ii) Tax deductible versus non-deductible interest expense; PA1 (iii) Charges, including interest, which may be billed (i.e., passed thru) to a customer or client of a cardholder; and PA1 (iv) General or specific cost control accounting.
Under the present billing system utilized by all credit card issuers, in order to account for each individual charge, the cardholder must examine each charge and determine from the person incurring the charge, which may be an employee, family member, etc. the nature and purpose of the charge. This presents a substantial accounting undertaking which is exacerbated where an organization or family has numerous persons incurring charges on one account.
Furthermore, when paying a credit card bill, present billing methods do not allow a cardholder to specify a sub-account(s) to which all or a portion of the payment is to be credited, and to thereby leave outstanding balances, with accruing interest charges, in other sub-accounts, in accordance with the tax, business or accounting needs of the cardholder. At the present time, there is no method by which a cardholder can allocate payments so as to control and identify the specific prior charges as to which interest is accruing. This shortcoming may have adverse tax and business consequences for the cardholder. For instance, a tax deduction for the payment of accrued interest expense may be lost or the right to pass the interest charges on to a customer or client of the cardholder may be lost because the interest expense cannot be tied to a particular charge or group of charges. The present invention, therefore, produces a useful, concrete and tangible result because the creation of the sub-accounts results in substantive changes in tax and business consequences to the cardholder which cannot be achieved with any presently existing credit card billing methods or bookkeeping method which may be employed by the cardholder.
The present invention develops a unique method to allow each person incurring credit card charges to designate a specific sub-account to which each charge and interest attributable thereto shall be allocated by the credit card issuer to be reflected on each billing statement to the cardholder. The cardholder may thereby obtain the information provided by the separate sub-account listings on each credit card statement to satisfy and resolve the credit card holders need to account for various categories of charges, such as:
In addition, this unique method will also allow the credit card holder to specify each sub-account to which each monthly or other periodic payment by the cardholder is to be allocated, thereby determining which specific charges are to remain outstanding and accrue interest charges.